Thinking Electronic Industrial (TWSE:2428) Is Paying Out Less In Dividends Than Last Year

Thinking Electronic Industrial Co., Ltd. (TWSE:2428) has announced that on 20th of September, it will be paying a dividend ofNT$5.20, which a reduction from last year's comparable dividend. This means that the dividend yield is 3.0%, which is a bit low when comparing to other companies in the industry.

See our latest analysis for Thinking Electronic Industrial

Thinking Electronic Industrial's Earnings Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, Thinking Electronic Industrial was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 9.7% over the next year. If the dividend continues along recent trends, we estimate the payout ratio will be 46%, which is in the range that makes us comfortable with the sustainability of the dividend.

Thinking Electronic Industrial Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was NT$2.00, compared to the most recent full-year payment of NT$5.20. This works out to be a compound annual growth rate (CAGR) of approximately 10% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

We Could See Thinking Electronic Industrial's Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Thinking Electronic Industrial has seen EPS rising for the last five years, at 6.3% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Thinking Electronic Industrial's Dividend

In general, we don't like to see the dividend being cut, especially when the company has such high potential like Thinking Electronic Industrial does. The cut will allow the company to continue paying out the dividend without putting the balance sheet under pressure, which means that it could remain sustainable for longer. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Are management backing themselves to deliver performance? Check their shareholdings in Thinking Electronic Industrial in our latest insider ownership analysis. Is Thinking Electronic Industrial not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.